Keeping the foodservice equipment marketplace up to date with the latest menu and concept trends.


This Week in Foodservice

New Concept for Starbucks, Employment Appears Strong, Off-Premise Stats

The National Restaurant Association’s Restaurant Performance Index edged up 0.3 percent to a final reading of 100.7 for August. This marks the first increase in the index in three months. But the Current Situation Component of the Index hit 100.3, a decline of 0.5 percent. Forty eight percent of those surveyed report an increase in August same-store sales vs. 52 percent in July. Operators also reported a net decline in customer traffic.

Driving the increase in the RPI was a 1.1 percent rise in the Expectations Index with operators feeling the economy will improve in the next 6 months. Just 32 percent of those surveyed expect sales to increase in 6 months – the lowest level in 2 years.

The picture is a little brighter when it comes to operators’ investment in their businesses. Sixty-two percent said they had made a capital expenditure for equipment, expansion or remodeling in the past three months. This is up from 50 percent in the July survey and the highest level in 9 months. Looking ahead, 60 percent of operators say they plan to make a capital investment for equipment, expansion or remodeling in the next 6 months. This is up from 48 percent in July.

Economic News This Week

  • The Institute for Supply Management’s Manufacturing Index dropped to 47.8 in September, its second consecutive monthly decline. This is down from 49.1 in August. Any reading less than 50 indicates declining activity. The New Orders Index did rise by 0.1 percent from August but stayed in negative territory at 47.3. All the other future indicators showed declining activity with the Production Index at 47.3, the Employment Index at 46.3 and Orders Backlog Index at 45.1. Of the 18 manufacturing industries included in the study, only 3 reported growth. The Manufacturing Index reading of 47.8 is the lowest it has been since June of 2009.
  • The Institute for Supply Management’s Non-Manufacturing Index Declined in September. Unlike the manufacturing sector, non-manufacturing continued to grow but at a slower rate. The September Index fell to 52.6 in September from 56.4 in August. (Any number greater than 50 indicates expansion.) The Business Activity/Production Index fell to 55.2 in September from 61.5 in August. The New Orders Index dropped to 53.7 in September from 60.3 In August. The Employment Index declined to 50.4 in September from 53.1 in August. The Orders Backlog Index did rise to 54.0 in September from 49.0 in August. Of the non-manufacturing industries studied, 4 reported decreases and 13 reported growth. Accommodations & Foodservices were in the latter group showing up in the middle of the pack. While the numbers are certainly better than those of the Production Index, the Non-Manufacturing Index is at its lowest point in 3 years.
  • The Chicago Production Manufacturing Index mirrored the National PMI by falling into contraction mode. The index declined to 47.1 in September from 50.4 in August. Any reading that exceeds 50 shows growth while less than 50 indicates declining activity.
  • New orders for manufactured goods decreased 0.1 percent in August, per data from the U.S. Census Bureau. Shipments of manufactured goods fell 0.1 percent, too. The unfilled orders index, though, increased 0.1 percent.
  • Initial-jobless claims hit 219,000, an increase of 4,000 for the week ending September 28, per the U.S. Department of Labor. At 212,500, the 4-week moving average was unchanged from the previous week.
  • The economy added 135,000 new jobs in September, per data from ADP. Roughly half of the new jobs came from large employers, organizations with 500 or more employers. The Leisure & Hospitality sector saw employment rise by 18,000 for the month.
  • U.S. employment increased by 136,000 in September, according to the U.S. Bureau. Private employment rose by 114,000 while government entities added 22,000 new jobs. So far in 2019 payroll growth has averaged 161,000 a month, down from a monthly average of 223,000 in 2018. The Bureau also revised the number of new jobs up in both July and August. The unemployment rate fell from 3.7 percent in August to 3.5 percent in September. The last time the unemployment rate was this low was in December 1969.

Foodservice News This Week